The DC week was highlighted by a dramatic evening of testimony before the 01/06 House Committee; time will tell if there is any political impact on the case the Committee is building against former President Trump.  This week also saw talks between a bipartisan group of Senators proceed behind closed doors as they try to reach an agreement on some sort of gun legislation.  With many Republicans opposed to any gun bill a compromise will require at least 10 Republican Senators to join all 50 Democrats to end a filibuster and get a vote on the package.

Markets are focused on next week’s meeting of the Federal Open Markets Committee (FOMC) where there is widespread anticipation of another 50bps increase in rates.  This will be the first meeting where Biden Fed appointees Cook and Jefferson will be participating. As I have been writing for months, Chair Powell has been clear that he and the Fed will telegraph rate policy and not surprise markets.  This policy is why there is so much confidence that there will be a 50bps increase next week.

Vice Chair Lael Brainard, an Obama appointee and likely one of the more dovish Governors, a week ago told CNBC that it is: “very hard to see the case” for pausing rate hikes.

This past week also saw the Senate Ban...

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